Bragar Eagel & Squire, P.C. Reminds Investors That Class Action Lawsuits Have Been Filed Against Generac, Veru, Gap, and Singularity and Encourages Investors to Contact the Firm
NEW YORK, Jan. 18, 2023 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, reminds investors that class actions have been commenced on behalf of stockholders of Generac Holdings, Inc. (NYSE: GNRC), Veru Inc. (NASDAQ: VERU), The Gap, Inc. (NYSE: GPS), and Singularity Future Technology Ltd. (NASDAQ: SGLY). Stockholders have until the deadlines below to petition the court to serve as lead plaintiff. Additional information about each case can be found at the link provided.
Generac Holdings, Inc. (NYSE: GNRC)
Class Period: April 29, 2021, - November 1, 2022
Lead Plaintiff Deadline: January 30, 2023
Generac is a Wisconsin-based producer of residential generators and backup power systems. In recent years, Generac expanded its business to include solar-based clean energy systems. Generac's solar offering, called the PWRcell, is a battery-based system that stores and manages electricity generated from solar panels. A critical part of the PWRcell system is the SnapRS rapid shutdown a device meant to shut off the flow of electricity from solar panels to the rest of the system. Generac sells its PWRcell systems, including the SnapRS component, primarily through independent residential dealers, known as channel partners. Those channel partners, in turn, sell or rent the product to the end consumer, providing installation and continued maintenance services for the PWRcell systems. The complaint alleges that, throughout the Class Period, Defendants made numerous materially false and misleading statements and omissions concerning the safety and success of the Company's clean power products, and the number of channel partners Generac relies on to sell, install, and service those products. Specifically, Defendants repeatedly touted to investors that safety is paramount and that the Company's solar products went through multiple rounds of design review to ensure that [they] meet all applicable internal engineering designs and safety standards . . . . Defendants also falsely represented to investors that Generac had a broad and diverse network of channel partners, and claimed that no single such partner provided more than 6% of the Company's sales. In addition, the complaint alleges that Defendants overstated the Company's earnings throughout the Class Period. Specifically, Defendants misrepresented or concealed the Company's warranty liability, and falsely assured investors that the Company's financial statements were prepared in accordance with Generally Accepted Accounting Principles. In truth, Defendants knew that, rather than ensuring the safety of its solar energy systems, Generac's SnapRS product was defective and dangerous, reducing the capacity of the solar energy systems in which it was installed, rendering costly equipment ineffective, requiring expensive maintenance, and would overheat, melt and, in some cases, start fires. Throughout the Class Period, numerous consumers filed complaints with regulators, and Generac's channel partners informed the Company of the SnapRS defect. Also, contrary to Defendants assertions, Generac's clean energy sales were heavily dependent on a single channel partner, Power Home Solar, LLC d/b/a Pink Energy (Pink Energy). Indeed, Generac faced significant undisclosed warranty liability as a result of the issues created by the SnapRS defect and resulting fallout with its largest channel partner, Pink Energy. As a result of Defendants misrepresentations and omissions, Generac common stock traded at artificially inflated prices during the Class Period. The truth began to emerge on August 1, 2022, when Pink Energy sued Generac, alleging, among other things, that Generac had provided defective components. The Pink Energy Complaint criticized Generac's failure to recall the dangerous SnapRS unit in light of Pink Energy's urging that they do so both for the sake of their business, and for the safety of their customers. Pink Energy also alleged that Generac did not disclose to Pink Energy that a firmware update, held out as a fix for the SnapRS issues, had known adverse effects and was shutting down entire PWRcell systems. In response to the serious allegations in the Pink Energy Complaint, the price of Generac shares declined by $3.31 per share. Then, on October 19, 2022, Generac published preliminary earnings showing dismal financial results for the third quarter of 2022, and announced a $55 million pre-tax charge relating to its clean energy product warranties and expenses, citing a distributor that had filed for bankruptcy. On this news, the price of Generac shares declined by $37.44 per share, or 25%. Finally, on November 2, 2022, Generac released third quarter earnings and lowered guidance on sales by its solar energy business for the remainder of the year by approximately 40%. The lowered guidance was attributed to the loss of a major customer during the quarter, along with the specific warranty-related issue i.e., the defective SnapRS component, which led to Pink Energy's bankruptcy.
In response to the November 2 disclosures, Generac common stock fell an additional $8.99 per share, or 8%.
Veru is primarily an oncology-based biopharmaceutical company that develops drugs for the management of breast and prostate cancers. Veru also develops medicines forCOVID-19 and other diseases related to viral and acute respiratory distress syndrome (“ARDS”), and has two FDA-approved products for sexual health.
Veru “opportunistically” developed sabizabulin (VERU-111), an orally administered “microtubule disruptor” – a drug that inhibits a virus’ ability to replicate itself – for the treatment of COVID-19 in hospitalized patients at high risk for ARDS. Veru had originally developed sabizabulin with the intention of using it as a treatment for prostate cancer. In January 2022, however, the FDA granted Veru’s COVID-19 program Fast Track designation. At the time, there was no authorized or approved treatment for hospitalized patients with severe COVID-19 infections.
Throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the data from the sabizabulin Phase 3 trial and the Company’s interactions with the FDA. Specifically, Veru misled its shareholders to believe that the data from the Phase 3 trial was sufficient to support Emergency Use Authorization (“EUA”) and even the submission of a New Drug Application (“NDA”) without any further studies. VERU’s filings therefore concealed the true risks faced by the Company in gaining approval for its EUA request.
Veru conducted a randomized, double-blind Phase 3 trial of sabizabulin’s effectiveness in treating hospitalized adults with moderate to severe COVID-19 at high risk for ARDS. The Phase 3 study sought to enroll 210 patients and evaluate mortality after 60 days of treatment.
On April 11, 2022, Veru issued a press release announcing that the company would be terminating sabizabulin’s Phase 3 trial early on the basis of positive interim data, after Veru’s Independent Data Safety Monitoring Committee conducted an interim analysis of the first 150 patients randomized into the study. Veru reported that sabizabulin “resulted in a clinically and statistically meaningful 55% relative reduction in deaths” relative to the placebo group (45% mortality at 60 days for the placebo group vs. 20% mortality for the sabizabulin-treated group).
On an investor call held that same day, Veru’s Chairman, President, and Chief Executive Officer Mitchell Steiner, M.D. (“Steiner”) told investors that Veru had been in “constant dialogue with FDA” since receiving the Fast Track designation and that the Company “plan[ned] to meet with FDA to discuss the next steps” including submitting an application for Emergency Use Authorization (“EUA”) on the strength of the positive Phase 3 interim results. Steiner also addressed the placebo group’s 45% mortality rate, stating that this death rate “underscores how sick these patients really are.”
During the call, an analyst from Cantor Fitzgerald asked Steiner to “elaborate” on any differences in the standard of care between the placebo group and the sabizabulin-treated group in the Phase 3 trial. Steiner responded: “So, there are no imbalances with males and females and with standard of care is exactly – I mean, the system works, so the randomization works. So, there are no imbalances.”
Veru’s share price more than doubled on April 11, 2022, from an opening price of $5.99 per share to a closing price of $12.28.
On May 2, 2022, Veru announced that the FDA had granted the Company a preEUA meeting to discuss sabizabulin’s Phase 3 results, to be held on May 10, 2022.
On May 11, 2022, Veru issued a press release announcing that in the May 10, 2022, pre-EUA meeting, the FDA “agreed that the efficacy and safety data from the completed Phase 3 clinical study in hospitalized COVID-19 patients at high risk for acute respiratory distress syndrome are sufficient to support the submission of a request for Emergency Use Authorization (EUA).” The press release quoted Steiner as saying “The discussion with FDA in the Pre-EUA meeting has established a direct path forward to expedite the availability of sabizabulin to the high risk hospitalized patients with COVID-19 . . . In the Phase 3 COVID-19 clinical study, sabizabulin demonstrated a clear mortality benefit in hospitalized moderate to severe COVID-19 patients on current standard of care with no significant safety signals.”
The May 11, 2022 press release further stated that the FDA had “agreed that the current safety data available for sabizabulin is sufficient to support the safety portion of a request for EUA submission,” and that “additional safety data that would be collected during the use of sabizabulin under the EUA, if granted, will be sufficient to support an NDA submission, and furthermore, that no additional safety clinical studies are required.” Veru’s stock price rose from its closing price of $7.79 per share on May 10, 2022, the day of the pre-EUA meeting with the FDA to close at $13 per share on May 13, 2022 the day after Veru filed its 2022 Second Quarter 10-Q in which it reported on the results of its pre-EUA meeting with the FDA.
On June 7, 2022, Veru submitted an EUA request with the FDA for use of sabizabulin to treat COVID-19.
On September 7, 2022, the FDA scheduled an October 6, 2022 meeting of the Pulmonary-Allergy Drugs Advisory Committee (“AdCom”) to vote on whether sabizabulin should be granted EUA. Although AdCom recommendations are not binding, the FDA ordinarily follows them.
On September 19, 2022, it was announced that the FDA had postponed the AdCom meeting to November 9, 2022.
On August 11, 2022, Veru filed its Quarterly Report for the second quarter of 2022 on Form 10-Q with the SEC, which stated that during the May 10, 2022 pre-EUA meeting, the FDA had “agreed that no additional efficacy studies were required to support an EUA application or a new drug application (NDA)” for sabizabulin, that “no additional safety data was required,” and that “[t]he FDA agreed that the request for the EUA is supported by efficacy and safety [data] from our positive Phase 3 COVID-19 study . . . and no additional clinical trials are required to support an NDA submission.”
On November 9, 2022, the AdCom voted against granting Veru’s EUA request by an 8-5 margin. One AdCom member who voted against approval explained that there was “no direct evidence to support [sabizabulin’s] antiviral activity.” Veru’s stock price plummeted on the news, falling from its closing price of $15.01 per share on November 8, 2022 to close at $6.97 per share on November 10, 2022, a 54% one-day drop, wiping out over $640 million in market capitalization.
As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s securities, Plaintiff and other Class Members have suffered significant losses and damages.
According to the Complaint, the Company made false and misleading statements to the market. Gap suffered from significant management errors in its Old Navy brand, specifically related to the "BODEQUALITY" program which impacted its financial results. BODEQUALITY caused inventory risks to grow, despite the Company's claims to investors. Based on these facts, the Company's public statements were false and materially misleading throughout the class period. When the market learned the truth about Gap, investors suffered damages.
Between September and December of 2021, Defendants—including Jie who was later revealed to be a convicted fraudster on the run from Chinese authorities—engaged in a scheme of material misrepresentations and omissions to convince Plaintiffs to invest millions of dollars in Singularity’s purported cryptocurrency business that Defendants falsely claimed would earn Plaintiffs “10x” investment returns in a short period of time.
Relying on Defendants’ representations, Plaintiffs agreed to invest over $4.4 million for shares in Singularity pursuant to terms and conditions of a Securities Purchase Agreement (“SPA”) dated on or about December 14, 2021.
However, before the ink was dry on the SPA, Singularity began breaching its provisions.
Within days of Plaintiffs’ monies being wired to Singularity’s bank account, Singularity used those funds to pay off warrants held by earlier investors despite the fact that the SPA had represented that no warrants to other investors were outstanding and that Plaintiffs’ money would be used to further Singularity’s business operations.
Additional breaches of the SPA by Singularity include its failure to file required periodic reports (e.g., Form 10-Q) with the Securities and Exchange Commission (“SEC”), rendering as useless what had been a crucial term of the SPA—namely, the opportunity for Plaintiffs to timely receive unrestricted, free-trading shares of Singularity common stock directly from the issuer at a discount.
Singularity has since categorically failed to cure its regulatory filing deficiencies despite having ample financial resources to do so, thereby further destroying the benefit of what Plaintiffs bargained for in the SPA.
Because Singularity has failed to honor and breached the terms of the SPA, Plaintiffs are currently unable to remove the restrictive legends on their shares of stock and sell them into the public markets. In duping Plaintiffs to make their investment and then immediately breaching obligations under the SPA, Defendants have violated federal securities laws, committed common law fraud, and breached their contractual obligations.
To date, Singularity has failed and refused to return any of the monies that Plaintiffs invested.
As a result of Defendants’ wrongful conduct, Plaintiffs are entitled to an award for damages, punitive damages, attorneys’ fees, and the costs of bringing this action.
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.
